Inflation Is At 0%

[Derec]

Well, oil production can be an issue. The gasoline prices dropped recently due to the refining "issue". Which is how oil was able to skyrocket (5% or so) while gasoline prices actually dropped.

Oil price skyrocketed?

WTI has actually fallen 18% since the late September high.

 

[Derec]

The reason for the inflation we suffered was supply chain issues caused by Covid-19 and Covid-19 recovery.

Partly. The very generous fiscal stimulus (expanded unemployment benefits, expanded child tax credit, student loan pause) that lasted way too long, well after the economy fully reopened, played a major role too.

 

[Derec]

I think most of the reason for recent inflation (shown by many economic indicators and research) was due to corporate profit taking,

That's not how it works. Companies charge what the market will bear. Supply and demand. You had less supply due to supply chain issues, and more demand due to the consumers being flush due to all the fiscal stimulus. Result - higher prices. If the costs of companies do not rise as much or as fast as the prices, you get extra profits, at least for a while.

So most of the inflation was simple corporate greed. Welcome to capitalism.

It's supply and demand, not greed. And capitalism is still a much better system than the alternative, i.e. some level of socialism.
And to forestall that fruitless derail, Scandinavian countries are capitalist, not socialist.

 

[Derec]

We needed an educational spendaplaooza in place to get things really humming. Instead we have a bunch of high skill jobs and high school graduates to try and fill them.

Just throwing more money at it mindlessly will not solve the problem. We need to increase standards. Which is not politically palatable because of this ideology of "equity".
Take Oregon. High school graduation requirements have been removed for that reason.
Oregon just dropped all graduation standards, failing all of its students in the name of ‘equity’
No amount of spendapalooza can fix that level of stupidity and wrongheaded priorities.

 

[Gospel]

To me it's par for the course.

 

[Harry Bosch]

The reason for the inflation we suffered was supply chain issues caused by Covid-19 and Covid-19 recovery.

Partly. The very generous fiscal stimulus (expanded unemployment benefits, expanded child tax credit, student loan pause) that lasted way too long, well after the economy fully reopened, played a major role too.

Of course the inflation was mostly caused by the supply chain for the reasons outlined above by Jimmy. Ukraine war also had an impact. Not sure how the fiscal stimulus affected supply chain?

 

[Toni]

Fuck me sideways with a rusty railspike I yearn for the day when people fucking get it into their fucking skulls that oil production isn't the issue - it's the refining.

Not really true. Fracking IS an environmental nightmare, both at the fracking sites and at the sand mining sights, not to mention the refining and the burning of fuel. Tremendous cost to health for those who live near a sand mining operation.

 

[Derec]

Of course the inflation was mostly caused by the supply chain for the reasons outlined above by Jimmy. Ukraine war also had an impact. Not sure how the fiscal stimulus affected supply chain?

Fiscal stimulus did not affect the supply chain. It affected the other side, the demand side. The economy was flooded with money, and thus more money was chasing fewer goods and services --> inflation.

 

[Derec]

Not really true. Fracking IS an environmental nightmare, both at the fracking sites and at the sand mining sights, not to mention the refining and the burning of fuel. Tremendous cost to health for those who live near a sand mining operation.

Don't see how that was responsive to what patooka wrote, but I still have to respond.
Every extractive industry has an environmental footprint. I have not seen any evidence that fracking has a significantly higher footprint than other comparable industries or that it is an "environmental nightmare".
On the other hand, fracking is necessary to produce most of our oil and gas. Without it, we would have to import a lot more oil and we would have to import natural gas, instead of being able to export it. Starting in 2022, our strong production of these resources helped make Europe less dependent on Russia, especially for natural gas, by exporting it to Europe as LNG. At the same time, more oil production also means Russia has to sell their oil for less than they would be able to otherwise.

Not to mention that if oil and gas prices we pay were higher, it would have driven inflation even higher. And it may have even triggered a recession by now.

No, for all the bellyaching by the radical left, fracking is very much necessary for our energy security.

 

[Toni]

Not really true. Fracking IS an environmental nightmare, both at the fracking sites and at the sand mining sights, not to mention the refining and the burning of fuel. Tremendous cost to health for those who live near a sand mining operation.

Don't see how that was responsive to what patooka wrote, but I still have to respond.
Every extractive industry has an environmental footprint. I have not seen any evidence that fracking has a significantly higher footprint than other comparable industries or that it is an "environmental nightmare".
On the other hand, fracking is necessary to produce most of our oil and gas. Without it, we would have to import a lot more oil and we would have to import natural gas, instead of being able to export it. Starting in 2022, our strong production of these resources helped make Europe less dependent on Russia, especially for natural gas, by exporting it to Europe as LNG. At the same time, more oil production also means Russia has to sell their oil for less than they would be able to otherwise.

Not to mention that if oil and gas prices we pay were higher, it would have driven inflation even higher. And it may have even triggered a recession by now.

No, for all the bellyaching by the radical left, fracking is very much necessary for our energy security.

The thing is, Derek, you don’t live anywhere near any fracking or sand mining is done. I do. There are very real, very seriously negative health consequences for those who live near where they are mining or transporting sand, or where they are doing the actual fracking.

It is much, much, much smarter to dramatically reduce our consumption of petroleum ( and coal). We need to increase the efficiency of our homes and our vehicles and to expect every industry to do the same.

 

[Derec]

The thing is, Derek, you don’t live anywhere near any fracking or sand mining is done. I do.

I do not. I do live close to a major terminal of the Colonial Pipeline (a product pipeline) and I have lived in the past for years close to a major oil refinery though. But what does it matter? Facts are facts no matter where we live.

There are very real, very seriously negative health consequences for those who live near where they are mining or transporting sand, or where they are doing the actual fracking.

Do you have data on these "very seriously negative health consequences"? Or just anecdotes?

In any case, we need fracking. If there are problems, they need to be fixed as much as feasible. But we cannot afford not to frack right now.
At some point, shale deposits will be played out. Fracking is like a super straw. You can drink your milk shake faster.



So you may get your wish in a few years. But I for one hope that shale boom lasts until we can transition away from fossil fuels in an orderly manner.

It is much, much, much smarter to dramatically reduce our consumption of petroleum ( and coal).

Dramatically reducing our consumption of petroleum (and natural gas) is impossible in the time frame that would make fracking unnecessary. At least not without ruining the economy in the process. And banning fracking before decarbonizing the economy (which will realistically take decades) just means we have to import more fossil fuels including from unsavory regimes like Russia. At much higher prices too, which would (to bring this digression back on topic) also contribute to inflation.
Not exactly smart.

I will give you coal. It is the dirtiest fossil fuel. Not just in terms of CO₂ emissions per TWh of usable energy, but also in terms of pollutants such as particulates, polycyclic aromatics, heavy metals (such as Hg) and even radionuclides.
And guess what? Oil has been declining in the US in recent years, as natural gas - plentiful due to the shale revolution/fracking has increased.

In environmentalism there are tradeoffs. We can't do everything at once. Natural gas is far better than coal. And getting out of coal should be the number one priority, not just in the US but all over the world too.

We need to increase the efficiency of our homes and our vehicles and to expect every industry to do the same.

That alone will not do it, and even that will take time.

What will it take to reduce our need for crude oil? Well, adoption of EVs would help a lot. But EV sales are still in single digits. As are sales of hybrids.

I know California wants to phase out sales of new ICE cars by 2035. That's an ambitious goal, but even if successful, that will be one state and modern cars last 15-20 years easily. There will still be a lot of ICE cars even in California into the 2050s. That's what I mean by it will take time, decades, to transition away from fossil fuels.

One thing that would help would be a carbon tax. But not even Dems who push for a fracking ban are really pushing for a carbon tax. More expensive energy is not a vote winner.

Another thing that would help is to disincentivize huge vehicles through tax policy.

These two Chevy trucks are supposedly the same model, 30 years apart. The trend has been toward grotesquely huge trucks. Not only do they use more fuel, they also damage the roadways more. The simplified formula is that the road damage is proportional to the fourth power of the axle load - a vehicle that is twice the weight damages the roadway 16x more!

Let's look at power plants. No use closing down efficient combined cycle natural gas turbine plants just for cheap eco brownie points. These power plants are efficient, use clean-burning fuel that has much lower CO₂ emissions than coal. And they are designed to last decades. Turning them off prematurely wastes useful life. The priority should be to reduce coal use as much as possible, which means more fracked natural gas for the medium term.

What about homes? Electric heat pumps (reversible ACs basically) would be a more efficient choice than furnaces for most homes. But furnaces last a long time - so any retrofits would be gradual. And if heat pumps do not fit possibly cramped utility closet of an old 1970s house, the homeowner might opt out and get a new gas furnace when the old one conks out. They are also not necessarily a good choice in colder climates unless you bury the outside coil deep enough underground so it does not freeze. But that costs considerably more too.

One controversial way to decarbonize would be nuclear. It is safe - safer than even solar or wind based on deaths per TWh. It also has vey low CO₂ emissions - on par with renewables. But politically it is iffy.

 

[TV and credit cards]

We needed an educational spendaplaooza in place to get things really humming. Instead we have a bunch of high skill jobs and high school graduates to try and fill them.

Just throwing more money at it mindlessly will not solve the problem. We need to increase standards. Which is not politically palatable because of this ideology of "equity".
Take Oregon. High school graduation requirements have been removed for that reason.
Oregon just dropped all graduation standards, failing all of its students in the name of ‘equity’
No amount of spendapalooza can fix that level of stupidity and wrongheaded priorities.

Who said anything about mindless money throwing? It's about making money available to the states for their already established tertiary education systems. There is no reason federal money should not be provided for voc tech or an undergraduate degree. It is a waste of human resources to cut people loose after teaching them just the basics. Everyone who wants to be trained to a specialty and shows an aptitude for that specialty, should be, without financial concern. There is a lot of human capital there to be maximized, that would like nothing more than to be maximized.
The navy has been doing this for decades. They don't care if you have a high school diploma or a GED. Whatever the candidate shows an aptitude for, they can choose from. Then all the candidate has to do put their nose to it.

Oregon's does a disservice to its youngsters because in the real world, they are going to have to perform. No one gets to Costanza their way through life. These "historically marginalized students" will be adults marginalized in the job market. I've seen this in the navy too. When the economy is good, recruitment goes down, standards are lowered, it shows up in the fleet in people pushed through schools they had no business being in in the first place.

 

[Tigers!]

These two Chevy trucks are supposedly the same model, 30 years apart. The trend has been toward grotesquely huge trucks. Not only do they use more fuel, they also damage the roadways more. The simplified formula is that the road damage is proportional to the fourth power of the axle load - a vehicle that is twice the weight damages the roadway 16x more!

As a cyclist I am worried of getting hit by the monster of the right. I have survived being hit by a vehicle of the left but the same speed on the right side vehicle would kill me. And if you add a bull bar to the right. Ever worse.

Let's look at power plants. No use closing down efficient combined cycle natural gas turbine plants just for cheap eco brownie points. These power plants are efficient, use clean-burning fuel that has much lower CO₂ emissions than coal. And they are designed to last decades. Turning them off prematurely wastes useful life. The priority should be to reduce coal use as much as possible, which means more fracked natural gas for the medium term.

Agree

One controversial way to decarbonize would be nuclear. It is safe - safer than even solar or wind based on deaths per TWh. It also has vey low CO₂ emissions - on par with renewables. But politically it is iffy.

Nuclear in Australia is the lady whose name cannot be mentioned in polite company.

 

[Jimmy Higgins]

Why is fracking being talked about in a thread on inflation?!

 

[Loren Pechtel]

How much of the inflation is simply a rebound from the time the economy was slowed by Covid?

 

[TV and credit cards]

How much of the inflation is simply a rebound from the time the economy was slowed by Covid?

Sure it was that. It's like liberty call after months out at sea. Everyone had money in their pockets. Everyone spent like sailors. Only difference being sailors out at sea don't whine like little bitches that they want to go out and play.
And people seemingly do not want to slow the party as consumer debt levels are rising. We'll see how Christmas spending goes this year.

It was also demand for shipping.

It was also China not coming out of covid restrictions the same time as the west.

And if anyone thinks it wasn't also companies padding their profit margin amongst all this chaos is naive.

 

[Derec]

Who said anything about mindless money throwing?

The concept of a "spendapalooza" kind of implies that.

It's about making money available to the states for their already established tertiary education systems.

It should come with strings linked to academic standards.
I know of a local public university[sic] here in metro Atlanta. Over the last 5 years the standards have dropped precipitously. Classes covering less material then they used to and than is common in other comparable colleges. I am talking GenChem II class skipping the entirety of redox and electrochemistry and giving short shrift to thermodynamics. Then you have random unproctored online exams (that are trivially easy to cheat on) in non-online classes, I suspect in order to artificially inflate grades. None of this should be allowed in an accredited institution of supposedly higher learning. Btw, the K-12 system in the same county this university[sic] is situated lost accreditation for a few years some years ago. And the sheriff was sent to federal prison for civil rights violations.

There is no reason federal money should not be provided for voc tech or an undergraduate degree.

For public schools at least. But again, it should be linked to standards. I must say, especially voc tech is not getting enough attention. Not everybody is university material and that's ok. Instead of dumbing down universities so everybody can go and graduate (even if they require remedial math and/or English), voc tech should be emphasized for many.

It is a waste of human resources to cut people loose after teaching them just the basics.

We agree on much here.

Oregon's does a disservice to its youngsters because in the real world, they are going to have to perform.

Agreed here too. It's a shortsighted policy.

 

[Derec]

As a cyclist I am worried of getting hit by the monster of the right.

Yeah. Those high hoods are killers for pedestrians and cyclists.

Nuclear in Australia is the lady whose name cannot be mentioned in polite company.

Mrs. Voldemort?

But at least coal is fine in polite company down under, I guess.
Australia’s energy transition is in trouble

 

[Derec]

Why is fracking being talked about in a thread on inflation?!

I made an offhand reference to fracking as a major reason why the fuel prices are as low as they are (without fracking gasoline would easily be ~$5/gal, and natural gas would be much more expensive as well) and then Toni went on one of her screeds. By the way, she still owes me a reply.

 

[Derec]

How much of the inflation is simply a rebound from the time the economy was slowed by Covid?

Most of it. But the rebound was supercharged by all the extra federal spending such as extended unemployment and child tax benefits that went on long beyond when the economy reopened.